Why Are Warren Buffett Quotes Significant?

Legend has it that Warren Buffett compounded his personal account at 60% between 1950 and 1956. After that, he took over a textile firm—Berkshire Hathaway. Over the years, Buffett transformed it into an investment giant, compounding returns at 20% between 1956 and 2011 (compared to the S&P 500 average of nine percent). (Source: Berkshire Hathaway, last accessed May 13, 2015.)
For new investors, quotes from this madly successful investor are definitely worth reading; and for long-time investors, they’re always worth re-reading. So, what does Buffett have to teach us?

Buffett quote #2: “Long ago, Ben Graham taught me that ‘Price is what you pay; value is what you get.’ Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”Buffett quote #3: “When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”Buffett quote #4: “You want to be greedy when others are fearful. You want to be fearful when others are greedy. It's that simple.”Buffett quote #5: “After all, you only find out who is swimming naked when the tide goes out.”Buffett quote #6: “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”Buffett quote #7: “Wide diversification is only required when investors do not understand what they are doing.”Buffett quote #8: “Investors making purchases in an overheated market need to recognize that it may often take an extended period for the value of even an outstanding company to catch up with the price they paid.”Buffett quote #9: “If past history was all there was to the game, the richest people would be librarians.”Buffett quote #10: “The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities—that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future—will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands.”Also Read: Stock Market Crash in 2015 is Coming, Despite Widespread Bullishness

Warren Buffett Quote Takeaways

When Buffett talks about investing, he focuses on rational decision-making. Logical decisions can only be made when investors take the time to do their own research and set a clear strategy for their investment approach. Having a plan, being able to measure its success, sticking to it, and having an exit strategy will put wise investors miles ahead of those making impulse decisions based on news.
But, even the greats can be wrong. In his latest letter to shareholders, Buffett mentions that not every investment worked out as planned, with his own rare mistakes costing Berkshire billions. (Source: Berkshire Hathaway, last accessed May 13, 2015.)
The investing guru admits to such investment pitfalls as omitting to buy great businesses and conversely buying into companies that eventually failed. For example, he admits to not buying Wal-Mart Stores Inc. (NYSE/WMT) when it was a sure thing. And he regrets buying into Tesco PLC (LSE/TSCO.L), the U.K.’s largest grocery retailer, in 2012.
An important takeaway to consider here is that, despite thorough research, investment results cannot be predicted. So, before entering a trade, keep all of Warren Buffett’s advice in mind; but also plan an exit strategy before you buy any stock.

Warren Buffett: Top 10 Investing Quotes

Warren Buffett is a legendary investor and the manager of the $100-billion hedge fund, Berkshire Hathaway Inc. Below are some Warren Buffett quotes worth pay attention to in 2015 and going forward.

Why Are Warren Buffett Quotes Significant?

Legend has it that Warren Buffett compounded his personal account at 60% between 1950 and 1956. After that, he took over a textile firm—Berkshire Hathaway. Over the years, Buffett transformed it into an investment giant, compounding returns at 20% between 1956 and 2011 (compared to the S&P 500 average of nine percent). (Source: Berkshire Hathaway, last accessed May 13, 2015.)

For new investors, quotes from this madly successful investor are definitely worth reading; and for long-time investors, they’re always worth re-reading. So, what does Buffett have to teach us?

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